[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2351 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2351

 To amend the Truth in Lending Act to prohibit the distribution of any 
  check or other negotiable instrument as part of a solicitation by a 
    creditor for an extension of credit, to limit the liability of 
    consumers in conjunction with such solicitations, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 24, 1999

 Mr. LaFalce (for himself, Mr. Watt of North Carolina, Mr. Vento, Mr. 
 Frank of Massachusetts, Mrs. Maloney of New York, Mr. Gutierrez, Mr. 
 George Miller of California, and Mr. Luther) introduced the following 
  bill; which was referred to the Committee on Banking and Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Truth in Lending Act to prohibit the distribution of any 
  check or other negotiable instrument as part of a solicitation by a 
    creditor for an extension of credit, to limit the liability of 
    consumers in conjunction with such solicitations, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Unsolicited Loan Check Consumer 
Protection Act of 1999''.

SEC. 2. UNSOLICITED LOAN CHECKS PROHIBITED.

    (a) In General.--Chapter 2 of the Consumer Credit Protection Act 
(15 U.S.C. 1631 et seq.) is amended by adding at the end the following 
new section:

``SEC. 140. SOLICITATIONS FOR CONSUMER LOANS.

    ``(a) `Live' Loan Checks Prohibited.--No consumer credit which is 
otherwise subject to this title may be extended by any creditor through 
the use of a check or other negotiable instrument which has been sent 
by the creditor to the consumer in connection with a solicitation by 
the creditor for such extension of credit, unless the consumer has 
submitted an application for, or otherwise requested, such extension of 
credit before receiving the check or instrument.
    ``(b) Consumer Not Liable.--If any creditor includes a check or 
other negotiable instrument in a solicitation to a consumer for an 
extension of credit sent by a creditor to a consumer in violation of 
subsection (a)--
            ``(1) the consumer shall not be liable for the amount of 
        any such check or other negotiable instrument; and
            ``(2) no information on any liability of the consumer 
        alleged by the creditor to have been established through such 
        check or other negotiable instrument may be reported to or 
        received by any credit agency (as defined in section 603 of the 
        Fair Credit Reporting Act) or included in any consumer credit 
        report under such Act.
    ``(c) Regulations.--
            ``(1) Regulations required.--
                    ``(A) In general.--Before the end of the 6-month 
                period beginning on the date of the enactment of the 
                Unsolicited Loan Check Consumer Protection Act of 1999, 
                the Board shall prescribe final regulations to 
                implement the requirements of this section.
                    ``(B) Modifications.--The Board shall modify and 
                clarify any regulation prescribed under subparagraph 
                (A) whenever the Board determines such action to be 
                necessary to prevent any circumvention of the 
                requirements of this section or to facilitate 
                compliance with such requirements.
            ``(2) Limitations on `look-alike' checks.--
                    ``(A) Regulations authorized.--The Board may, if 
                the Board finds that such action is necessary to 
                prevent confusion by consumers, prescribe regulations 
                setting forth guidelines for the use, in a solicitation 
                for an extension of credit, of certificates, vouchers, 
                or other nonnegotiable instruments that are intended to 
                have the appearance of a check or other negotiable 
                instrument, but which do not violate subsection (a) of 
                this section.
                    ``(B) Disclosures and other requirements.--Any 
                regulation prescribed under subparagraph (A) shall 
                include such disclosures and modifications relating to 
                the appearance and use of certificates, vouchers, or 
                other nonnegotiable instruments in a solicitation for 
                an extension of credit as the Board determines 
                necessary or appropriate.''.
    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Consumer Credit Protection Act is amended by adding at the end the 
following new item:

``140. Solicitations for consumer loans.''.
    (c) Scope of Application.--The requirements of this Act and the 
amendments made by this Act shall apply to solicitations for extensions 
of credit made to consumers after the date of enactment of this Act.
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